Fpl Seeks Hike, Cites Fuel Cost

Florida Power & Light Co. asked regulators to lift its rates by about 6 percent to cover higher fuel costs, another sign of oil prices raising the cost of living.

The proposed increase, the first in about two years for FPL, would take effect in June and would raise the typical monthly residential bill by $4.39. Even with the increase, FPL estimates it will probably ask for another 22 cent raise next year.

In February, FPL said it didn't expect to adjust rates to cover higher oil prices. But that was before New York oil futures reached a 10-year high of $34 a barrel in March. They've since dropped and are about $28 a barrel.

"We did not expect the price of fuel to go as high as it has, nor did we expect them to stay up there as long as they have," FPL spokesman Bill Swank said.

Higher electric rates would be the latest impact felt by consumers from the rising price of energy. Gasoline rose to an average price of $1.52 a gallon in April. Airlines have added fuel surcharges to the cost of tickets, and the cost of many other goods has risen to cover higher trucking and transportation fees.

Economists, seeing a reduction in consumption, estimated in March that higher energy prices could cut about a half a percentage point off the United States' economic growth rate this year.

"The high price of oil and gas has had a major impact on consumers," said Mark Ferrulo at the Florida Public Interest Research Group, a consumer advocacy organization.

Now, Florida's electric companies want to recover their costs as well. The state's other two utilities, Tampa Electric Co. and Florida Power Corp., also requested increases, albeit lower than FPL's.

FPL has been hit hard by rising energy costs because 17 of its 19 plants in Florida use natural gas or oil for fuel, according to the company's most recent annual report.

The utilities will probably be allowed to raise rates, regulators said, because fuel prices have clearly gone up and utilities are allowed to pass energy costs directly to customers. When energy prices fall, so do rates; FPL lowered electric rates by about 2 percent only five months ago, in part because of lower energy costs the previous year.

"You just can't predict the cost of fuel," said Kevin Bloom, a spokesman at the commission. "If it takes a spike the way it has, you have to make a correction for that."

Even with the proposed rate increase, electric rates still will be lower than in early 1999, when the Public Counsel's Office negotiated a 6 percent cut in FPL rates that was unrelated to fuel prices.

The Florida Public Service Commission will make the final decision on the latest rate proposal Tuesday.

The utilities will be held accountable for whatever increases they are given, Bloom said. The commission has the power to deduct those expenses later when it sees the full accounting, he said.

Leslie Hillman can be reached at lhillman@sun-sentinel.com or 954-356-4664.